Reforms implemented across Egypt’s banking sector means that the sector is well placed for growth at home and abroad.
That is the upbeat assessment of Arab African International Bank’s vice chair and MD Sherif Elwy.
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Speaking to Oxford Business Group’s, Global Platform, Elwy says that the reforms date back to 2003-2004. And the reforms ensured that firm foundations were in place when the Egyptian pound was floated almost three years ago.
Since then, he adds, banks have improved their performance, supported by a more attractive operating environment.
“The Egyptian banking system is very solid and the performance has been very positive. A lot of governance measures were put in place. These include a requirement for capitalisation and the way the banks behave in terms of extending credit. When the flotation happened in November 2016, banks were ready.”
Elwy says that neighbouring markets hold plenty of promise for Egyptian banks growth. Furthermore, moves are under way to facilitate cross-border expansion.
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By GlobalDataEgyptian banks growth: fintech will drive regional expansion
He says that segments such as fintech will be key in driving regional expansion but warns that there is no room for delays in their development.
“You need to move fast. It’s not a matter of whether we think or debate ‘Is it good to use this technology?’ It’s a matter of how fast you get your system adapted to go in this direction and provide for your customers.”
He also acknowledges the disparity between Egypt’s vibrant SME sector and the support it receives from the country’s banking industry.
And he recognises that banks have traditionally focused on the large corporates. This is in part because their size makes them cost effective. Moreover, it is also due to the fact that they had long-term plans in place.
“But with the reform process, the central bank has started to perform with a futuristic approach.”
This means that it is reacting to what is happening in the market. At the same time, it pushes banks towards focusing on the SME sector.
